In a post-COVID context that is not very favorable to sales of PCs and laptops, the American giant Dell has been enjoying an impressive rise in its share price for several weeks. A success that the brand owes, in particular, to AI.
On September 1, Dell saw its share price jump 22.2% to reach a value never before recorded for the Texan brand. A record for the group, (group which was condemned following false promotions on its screens) won when it had just revised upwards its forecasts for the whole of the year, following good results on the field of AI, and while the demand for computer hardware tends to stabilize again after months of decline, underlines Reuters.
Unprecedented prosperity for Dell shares
In detail, we learn that Dell’s action reached a peak of $70.28 last week, while trading volume was 5.4 times higher than its 10-day moving average. On September 1, Dell shares declined slightly to fall back to $68.19, but the trend remains impressive despite everything: +74.53% since the start of the year.
” Results and forecasts supported improving order trends in the business vertical “comments for his part Samik Chatterjee, analyst at JPMorgan. A trend also observed in companies other than Dell, such as CDW Group, Cisco Systems or Hewlett Packard Enterprises.
AI in an attractive mix for investors
It must be said that Dell for its part published sales and earnings per share above analysts’ estimates for the second quarter of 2023… which clearly contributed to the advantageous situation from which the group currently benefits. The firm also announced a turnover up 11%, compared to the first quarter, on its branch dedicated to servers and networks, to reach the bar of 4.27 billion dollars. The reason for this increased demand? The launch of AI-optimized servers, Dell said.
However, for JP Morgan analysts, AI is not considered the main driver of Dell’s sudden prosperity. The investment bank nevertheless indicates that it ” contributes to the visibility of a recovery “, adding that” 20% of AI orders (in revenue) are for AI-based servers.”
Anyway, Dell has more than ever the wind in its sails even if the group has announced the dismissal of 5% of its workforce. Currently, and as reported Reuters10 analysts have already revised upwards their price targets for shares of the Round Rock giant.
Source : Reuters
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